Xinhua news agency said rescuers have heard sounds coming from the upturned boat. At least one person is dead.
The boat reportedly did not send out an SOS signal before sinking.
Media reports say several people who had swum to shore alerted the police with the help of fishermen.
Only about 10 people have been rescued so far, and some with minor injuries have been take to hospital, said state media. Rescue work has been hampered by strong winds and heavy rain.
Hundreds of soldiers have been dispatched, and a high-powered salvage ship is on the way to pull the boat upright, reported China Central Television (CCTV).
-BBC